A payment gateway is a middleman between your eCommerce store and the customer. The payment gateway collects money from customers and sends it to your bank account or another designated payment processor.
The best way to think about a payment gateway is like a bank account. But it goes beyond that; it’s also an interface with APIs that lets you accept payments via credit card, debit card, or other methods.
Types of Payment Gateways
There are two types of payment gateways:
- Direct
The merchant directly receives the customer’s credit card information from them, typically via email or an online form.
- Indirect (third-party)
The merchant doesn’t capture any credit card information from the customer, but a third party does. There are several different types of indirect gateways that merchants can choose from including PayPal, Amazon Pay, and Authorize.net
There are three approaches to valuing a business – market, earnings and asset. The benefit of utilizing money flow as a key input for a enterprise valuation is that it can be fully independent of the accounting technique in place. However, the usage of cash stream will be somewhat problematic since it normally varies 12 months to 12 months and subsequently it’s not always a superb foundation for predicting the longer term. This may be mitigated by utilizing forecast cash flows since this volatility diminishes; money move is extra acceptable to Discounted Cash Circulation valuations than to performance measurements and valuation multiples.